Higher Education: The Problem and the Solution

CollegeStepsGuyI believe the federal government has no place in higher education. In fact, there is no provision in the U.S. Constitution for federal college grants or guaranteed student loans. This is a State responsibility.

However, the involvement of the federal government in higher education has caused tuition and fees to skyrocket. Since 1985, the overall consumer price index has risen 115 percent while the college education inflation rate has risen nearly 500 percent (Forbes 5/24/2012; see also U.S. News 7/29/15).

What Caused Sky-Rocking College Costs?

The involvement of the federal government has skewed the supply and demand forces. By wanting to help, they have actually made it harder for students and families to afford higher education or trade and vocational training.

The federal government created the problem and then compounded it. When they took over the loan programs, they also forbid federal student loans to be dismissed under bankruptcy. It’s like education prison for some unlucky graduates!

Let me explain what happened by using monetary inflation as an analogy. The Federal Reserve (U.S. central bank) has a two percent inflation target. They deliberately cause inflation by adding more money into the system than is demanded, which is what Congress did with education. They added more college loans and grants to the educational system than the market needed. The result was college inflation.

Both the Republican and Democratic Party are to blame, but the Democrats are far more to blame. Why? To be frank, the Democrats goal was to cause a need for government involvement. With college now so expensive and debt levels now so high, they can step in with a government program to save the day and get more Democratic votes in the process. Do you have any doubt about what I’m saying? Just ask any college student who supports Bernie Sanders (The Federalist, Mar 3, 2016).

There was a time some 30 or 40 years ago that a college students could fund their education by working their way through school. Upon graduation a prudent student would have little or no debt. Any debt they had was usually very manageable. 

The solution really isn’t something the Idaho legislature can fix, today. The U.S. government needs to get out of funding college or vocational education and allow the states and the private market to take over. An interim step would involve capping the student loan debt payment to a percentage of one’s income (federal legislation). But, I’d only advocate this cap if the federal government would also exit the student financial aid market completely. 

About Credit Hour Costs and Privatization of Higher Education

I have three university degrees and I can say firsthand that I got the worst career advice from my college professors and counselors. They nor I had an understanding of the market for my degree once I graduated. I will say that they did discussed some statistics, but it was all theoretical.

You see the college and university system is a socialist system and they can only speculate what the free market demands. In fact, like the Soviet Union or other government organizations, the project outward and develop short and long-term plans. They hope they can anticipate where the market will be and then they go to the legislature to ask for money to expand. If they’re wrong or if they miss a trend, they will have a shortage. They will also have a shortage if legislature will not fund expansion.

In fact, look at the higher education system. They either have too much supply for a program or too little capacity. So what do they do? If they are short of capacity they ration majors and limit who gets in to what degree program.

I once looked into getting a bachelor or nursing degree. All the public schools in the state had one to two year waits. I looked into private schools and I was able to enter the program at the very next quarter.

Why was this the case? The private school would expand and retract their programs according to demand. If they had a shortage of students they shrank their program. If they had a larger demand, they expanded the program. All of this happened without going to the legislature!

The Lack of Market Forces in Higher Education

Why does a college survey of films course cost the same (per credit) as a computer engineering course? Especially if few students want to take the course and few will ever use it in their chosen career field. To get students to take the film’s course, they require students to take it. Meanwhile, most highly demanded courses have waiting lines. 

So, without Market forces and supply and demand pressure, money is miss allocated to the film’s course, while students wait in line for the most coveted courses and degrees.

If there were a free market for college courses, students would know which were more valuable and which ones were less valuable. Better yet, public universities would compete with other public and private universities to satisfy student needs and demands.

Funding Should Follow the Student

Instead of funds going to the school, it should follow the student. The funds Idaho spends on public higher education should go to grants or scholarships to the student, not to university monopolies – just like the Post 9/11 GI Bill does. If we truly want our children to get a good education, we wouldn’t limit their choices either (aside from requiring schools to have a recognized certification). 

Credit Transfers

Why don’t courses transfer either? If a course is similar to another, especially at state universities or certified schools, why aren’t they completely transferable? This is another waste of money and a waste of our students’ time… and something the Idaho legislature could remedy.

As I said earlier, a better system would be one where the money followed the student, not the university. The universities would then have to woo students and compete on cost and quality. They’d be more like Amazon.com than BoiseState.edu.

Reggy Sternes

Reggy was a Republican Primary candidate for the State of Idaho House of Representatives (District 25A) in 2016. He believes in limited government, individual liberty and supports the Bill of Rights and more state sovereignty. The National Riffle Association endorsed him over the incumbent - he received an "A" grade. He is pro-life and supports a free-market approach to improve schools and health care. He holds bachelor degrees from the University of Idaho and Idaho State University and a master degree from Oregon State University. Sternes is a 23 year U.S. Navy combat-zone veteran, earned 23 individual and unit medals and ribbons, and obtained the rank of Commander.

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